By: Avery Wu
Post #4
September 5th, 2022
Current Public Policies
What is Biden's Student Forgiveness Plan?
As of August 24th, 2022, qualifying Americans can now receive forgiveness of up to $10,000 in student loan debt. With the rise in tuition of many colleges in America, this new plan will benefit millions of loan borrowers earning less than $125,000 each year. No student debt cancellation program like this has ever been enacted before. Although this plan may seem well thought out, there are still some major flaws that people have pointed out.
Flaws in the System
Increase in Inflation
With any new plan as big as this one, money is always going to be an issue. Many analysts believe that Biden should work to lower inflation instead of canceling student loans which can create higher inflation. This policy is expected to cost around $300 billion and can potentially lead to more money being printed as well as tax rates increasing which all lead to higher inflation. Right now, the economy has seen one of the highest inflation rates in its history as well as a recession nearing closer and closer.
Concentrated Audience
With midterm elections approaching fast, this new plan has surged Biden's approval ratings. Biden has continued to have one of the lowest approval ratings in history, and this plan is exactly what he needs to gain an edge. Young adults are the main recipients of this new plan, therefore Biden is trying to target a younger audience to generate better approval ratings and more votes. But is this audience too concentrated? What about the people who were responsible and took the initiative to already pay off their student debt loans? Or the people who decided not to go to college because of the cost? They are arguing that this encourages people to not pay off their loans and wait for the government to forgive them. Is there a solution to this problem?
Increase in College Tuition
Although this plan has helped college graduate students relieve their student debt, what about incoming or current college students? This plan sends the wrong message to colleges and essentially encourages colleges to increase their tuition because they know that up to $10,000 will be forgiven by the government. Will college tuition steadily increasing every year, this will hurt future students and deter many from even attending college.
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